Retail KPI dictionary: definitions and formulas
Plain definitions and formulas for the retail metrics that appear in Asian earnings calls, investor decks and operating reviews — with notes on how each one is commonly misused.
8 min read · Updated 1 August 2026
Retail metrics are defined loosely enough that two companies can report the same number and mean different things. This dictionary gives one workable definition per metric, the formula, and the most common way it gets bent.
Sales and demand
| Metric | Formula | Watch for |
|---|---|---|
| Like-for-like sales | Sales from stores trading both periods ÷ prior period | Which stores qualify, and whether e-commerce is included |
| Gross merchandise value | Total value of orders placed | Includes cancellations and returns unless stated |
| Average transaction value | Net sales ÷ transactions | Rises with price increases as well as basket growth |
| Units per transaction | Units sold ÷ transactions | The cleaner read on basket building |
| Conversion rate | Transactions ÷ visitors | Footfall counting method changes the denominator |
Margin and inventory
| Metric | Formula | Watch for |
|---|---|---|
| Gross margin | (Net sales − cost of goods) ÷ net sales | Whether inbound freight sits in cost of goods |
| Markdown rate | Markdown value ÷ gross sales | Promotional funding from suppliers can mask it |
| Sell-through | Units sold ÷ units received | Only meaningful with a stated time window |
| Inventory turns | Cost of goods ÷ average inventory at cost | Average of two points hides seasonal peaks |
| Weeks of cover | Inventory ÷ average weekly sales | Forward-looking version is far more useful |
| Shrinkage | Stock loss ÷ net sales | Includes admin error, not only theft |
Store productivity
| Metric | Formula | Watch for |
|---|---|---|
| Sales per square metre | Net sales ÷ trading area | Trading area versus gross leased area |
| Contribution per square metre | Four-wall contribution ÷ trading area | The honest version of the above |
| Occupancy cost ratio | Total occupancy ÷ net sales | Service charge and marketing levy must be included |
| Sales per labour hour | Net sales ÷ hours worked | Excludes stockroom hours in some definitions |
E-commerce and customer
| Metric | Formula | Watch for |
|---|---|---|
| Customer acquisition cost | Acquisition spend ÷ new customers | Whether discounts count as spend |
| Repeat rate | Customers with 2+ orders ÷ customers | Depends entirely on the window chosen |
| Contribution margin per order | Revenue − goods − fulfilment − payment − returns | Return cost is frequently omitted |
| Return rate | Returned units ÷ shipped units | Splits sharply by payment method in COD markets |
| First-attempt delivery rate | Delivered first try ÷ attempted | The core last-mile health metric in the region |
Key takeaways
- Define the comparable-store rule before quoting like-for-like sales.
- Gross merchandise value is a demand measure, not revenue.
- Contribution per square metre beats sales per square metre for every real decision.
- In cash-on-delivery markets, always report returns split by payment method.
Questions & Answers
Which metrics belong in a monthly operating review?
A short set: like-for-like sales, gross margin after markdown, occupancy cost ratio, weeks of cover, and contribution per square metre. Everything else is diagnostic and belongs in the appendix.
Why do reported e-commerce margins differ so much between companies?
Mostly because of where fulfilment, payment fees and returns sit in the P&L. Compare contribution margin per order where it is disclosed, and treat headline gross margin as non-comparable.
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